How does EIP-1559 impact transaction fees in the world of digital currencies?

3 answers

• Nov 27, 2021 · 3 years ago
  EIP-1559 is an Ethereum Improvement Proposal that aims to change the way transaction fees are calculated and paid on the Ethereum network. Currently, users have to bid for limited block space by setting a gas price, which can result in high fees during times of network congestion. EIP-1559 introduces a new mechanism where a base fee is burned and a tip is paid to miners. This is expected to make transaction fees more predictable and reduce overall fees in the long run.
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• Nov 27, 2021 · 3 years ago
  With EIP-1559, the base fee for a transaction is determined algorithmically based on network demand. This means that during times of high congestion, the base fee will increase, while during periods of low demand, the base fee will decrease. This mechanism aims to balance supply and demand for block space and prevent users from overpaying for transactions. Additionally, the burning of the base fee reduces the overall supply of Ethereum, potentially leading to deflationary effects.
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• Nov 27, 2021 · 3 years ago
  From the perspective of BYDFi, a digital currency exchange, EIP-1559 is expected to have a positive impact on transaction fees. By introducing a more predictable fee structure, users will have a clearer understanding of the costs associated with their transactions. This can improve user experience and attract more users to the Ethereum network. However, it's important to note that the actual impact of EIP-1559 on transaction fees will depend on various factors, including network usage and adoption.
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